Assets Cash Accounts receivable Inventory Wolfpack Company Balance Sheet June 30 Buildings and equipment, net of depreciation Total assets Liabilities and Stockholders' Equity $ 79,200 68,600 40,200 213,000 $ 401,000 $ 56,000 100,000 245,000 Accounts payable Common stock Retained earnings Total liabilities and stockholders' equity $ 401,000 Budgeting Assumptions: 1. All sales are on account. Thirty percent of the credit sales are collected in the month of sale and the remaining 70% are collected in the month subsequent to the sale. The accounts receivable at June 30 will be collected in July. 2. All merchandise purchases are on account. Twenty percent of merchandise inventory purchases are paid in the month of the purchase and the remaining 80% are paid in the month after the purchase. 3. The budgeted inventory balance at July 31 is $25,700. 4. Depreciation expense is $4,260 per month. All other selling and administrative expenses are paid in full in the month the expense is incurred. 5. The company's cash budget for July shows expected cash collections of $106,100, expected cash disbursements for merchandise purchases of $68,100, and cash paid for selling and administrative expenses of $20,740. Required: 1. For the month of July, calculate the following: a. Budgeted sales b. Budgeted merchandise purchases c. Budgeted cost of goods sold d. Budgeted net operating income 2. Prepare a budgeted balance sheet as of July 31.
Assets Cash Accounts receivable Inventory Wolfpack Company Balance Sheet June 30 Buildings and equipment, net of depreciation Total assets Liabilities and Stockholders' Equity $ 79,200 68,600 40,200 213,000 $ 401,000 $ 56,000 100,000 245,000 Accounts payable Common stock Retained earnings Total liabilities and stockholders' equity $ 401,000 Budgeting Assumptions: 1. All sales are on account. Thirty percent of the credit sales are collected in the month of sale and the remaining 70% are collected in the month subsequent to the sale. The accounts receivable at June 30 will be collected in July. 2. All merchandise purchases are on account. Twenty percent of merchandise inventory purchases are paid in the month of the purchase and the remaining 80% are paid in the month after the purchase. 3. The budgeted inventory balance at July 31 is $25,700. 4. Depreciation expense is $4,260 per month. All other selling and administrative expenses are paid in full in the month the expense is incurred. 5. The company's cash budget for July shows expected cash collections of $106,100, expected cash disbursements for merchandise purchases of $68,100, and cash paid for selling and administrative expenses of $20,740. Required: 1. For the month of July, calculate the following: a. Budgeted sales b. Budgeted merchandise purchases c. Budgeted cost of goods sold d. Budgeted net operating income 2. Prepare a budgeted balance sheet as of July 31.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Transcribed Image Text:Wolfpack Company
Balance Sheet
June 30
Assets
Cash
Accounts receivable
Inventory
Buildings and equipment, net of depreciation
Total assets
Liabilities and Stockholders' Equity
$ 79,200
68,600
40,200
213,000
$ 401,000
$ 56,000
100,000
245,000
Accounts payable
Common stock
Retained earnings
Total liabilities and stockholders' equity
$ 401,000
Budgeting Assumptions:
1. All sales are on account. Thirty percent of the credit sales are collected in the month of sale and the remaining 70% are collected in
the month subsequent to the sale. The accounts receivable at June 30 will be collected in July.
2. All merchandise purchases are on account. Twenty percent of merchandise inventory purchases are paid in the month of the
purchase and the remaining 80% are paid in the month after the purchase.
3. The budgeted inventory balance at July 31 is $25,700.
4. Depreciation expense is $4,260 per month. All other selling and administrative expenses are paid in full in the month the expense
is incurred.
5. The company's cash budget for July shows expected cash collections of $106,100, expected cash disbursements for merchandise
purchases of $68,100, and cash paid for selling and administrative expenses of $20,740.
Required:
1. For the month of July, calculate the following:
a. Budgeted sales
b. Budgeted merchandise purchases
c. Budgeted cost of goods sold
d. Budgeted net operating income
2. Prepare a budgeted balance sheet as of July 31.
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